[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7575 Introduced in House (IH)]

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118th CONGRESS
  2d Session
                                H. R. 7575

To amend the Higher Education Act of 1965 to provide loan deferment and 
loan cancellation for certain founders and employees of small business 
    start-ups, to amend the Small Business Act to establish a young 
         entrepreneurs business center, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 6, 2024

 Ms. Velazquez (for herself, Ms. Chu, Mr. Phillips, and Mr. McGarvey) 
 introduced the following bill; which was referred to the Committee on 
Education and the Workforce, and in addition to the Committees on Ways 
    and Means, and Small Business, for a period to be subsequently 
   determined by the Speaker, in each case for consideration of such 
 provisions as fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
To amend the Higher Education Act of 1965 to provide loan deferment and 
loan cancellation for certain founders and employees of small business 
    start-ups, to amend the Small Business Act to establish a young 
         entrepreneurs business center, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Supporting America's Young 
Entrepreneurs Act of 2024''.

SEC. 2. SMALL BUSINESS START-UP EMPLOYEE LOAN DEFERMENT AND 
              CANCELLATION.

    (a) Deferment.--Section 455(f) of the Higher Education Act of 1965 
(20 U.S.C. 1087e(f)) is amended--
            (1) in paragraph (1), by striking ``A borrower of a loan'' 
        and inserting ``Except as provided in paragraph (5), a borrower 
        of a loan''; and
            (2) by adding at the end the following:
            ``(5) No interest deferment eligibility for founders of 
        small business start-ups.--A borrower of a loan made under this 
        part shall be eligible for a deferment, during which periodic 
        installments of principal and interest need not be paid, during 
        any period not in excess of 3 years during which the borrower 
        is employed as a founder of a distressed area business (as 
        defined in subsection (r)(3)).''.
    (b) Loan Cancellation.--Section 455 of the Higher Education Act of 
1965 (20 U.S.C. 1087e) is amended by adding at the end the following:
    ``(r) Loan Cancellation for Certain Small Business Start-Up 
Founders and Employees.--
            ``(1) Founders of a distressed area business.--
                    ``(A) In general.--The Secretary shall cancel up to 
                $20,000 of the balance of interest and principal due, 
                in accordance with subparagraph (B), on any eligible 
                Federal Direct Loan not in default for a borrower who--
                            ``(i) has made 24 monthly payments on the 
                        eligible Federal Direct Loan after the date of 
                        the enactment of this subsection pursuant to 
                        any one or a combination of payments under a 
                        repayment plan under subsection (d)(1) or (g);
                            ``(ii) has been employed by a distressed 
                        area business founded by the borrower during 
                        the period in which the borrower makes each of 
                        the 24 payments;
                            ``(iii) is employed by such distressed area 
                        business at the time of such cancellation; and
                            ``(iv) has been approved for such 
                        cancellation by the young entrepreneurs 
                        business center established under section 49 of 
                        the Small Business Act (16 U.S.C. 631 et seq.).
                    ``(B) Loan cancellation amount.--
                            ``(i) In general.--After the conclusion of 
                        the employment period described in subparagraph 
                        (A), the Secretary shall cancel the obligation 
                        to repay $20,000 of the balance of interest and 
                        principal due as of the time of such 
                        cancellation on the eligible Federal Direct 
                        Loans made to the borrower under this part.
                            ``(ii) Limitation.--A borrower may not 
                        receive an aggregate amount of more than 
                        $20,000 under this subparagraph.
                    ``(C) Ineligibility for double benefits.--No 
                borrower may, for the same service, receive a reduction 
                of loan obligations under both this paragraph and--
                            ``(i) paragraph (2);
                            ``(ii) subsection (m); or
                            ``(iii) section 428J, 428K, 428L, or 460.
            ``(2) Employees of a small business start-up.--
                    ``(A) In general.--The Secretary shall cancel up to 
                $3,000 of the balance of interest and principal due, in 
                accordance with subparagraph (B), on any eligible 
                Federal Direct Loan not in default for a borrower who--
                            ``(i) has made 12 monthly payments on the 
                        eligible Federal Direct Loan after the date of 
                        the enactment of this subsection pursuant to 
                        any one or a combination of payments under a 
                        repayment plan under subsection (d)(1) or (g);
                            ``(ii) has been employed full-time by a 
                        small business start-up during the period in 
                        which the borrower makes each of the 12 
                        payments;
                            ``(iii) is employed full-time by a small 
                        business start-up at the time of such 
                        cancellation; and
                            ``(iv) has been approved for such 
                        cancellation by the young entrepreneurs 
                        business center established under section 49 of 
                        the Small Business Act (16 U.S.C. 631 et seq.).
                    ``(B) Loan cancellation amount.--
                            ``(i) In general.--After the conclusion of 
                        the employment period described in subparagraph 
                        (A), the Secretary shall cancel the obligation 
                        to repay $3,000 of the balance of interest and 
                        principal due as of the time of such 
                        cancellation, on the eligible Federal Direct 
                        Loans made to the borrower under this part.
                            ``(ii) Aggregate amount.--A borrower may 
                        not receive an aggregate amount of more than 
                        $15,000 under this subparagraph.
                    ``(C) Ineligibility for double benefits.--No 
                borrower may, for the same service, receive a reduction 
                of loan obligations under both this paragraph and--
                            ``(i) paragraph (1);
                            ``(ii) subsection (m); or
                            ``(iii) section 428J, 428K, 428L, or 460.
            ``(3) Definitions.--In this subsection:
                    ``(A) Eligible federal direct loan.--The term 
                `eligible Federal Direct Loan' means a Federal Direct 
                Stafford Loan, Federal Direct PLUS Loan, or Federal 
                Direct Unsubsidized Stafford Loan, or a Federal Direct 
                Consolidation Loan.
                    ``(B) Small business act definitions.--The terms 
                `distressed area business', `founder', and `small 
                business start-up' have the meanings given, 
                respectively, under section 49 of the Small Business 
                Act.''.

SEC. 3. YOUNG ENTREPRENEURS BUSINESS CENTER.

    The Small Business Act (15 U.S.C. 631 et seq.) is amended--
            (1) by redesignating section 49 as section 50; and
            (2) by inserting after section 48 the following new 
        section:

``SEC. 49. YOUNG ENTREPRENEURS BUSINESS CENTER.

    ``(a) Establishment.--There is established within the 
Administration a young entrepreneurs business center that shall--
            ``(1) provide certifications described under subsection 
        (b);
            ``(2) identify distressed areas under subsection (c); and
            ``(3) approve loan cancellation requests under subsection 
        (d).
    ``(b) Certification for Founders of Distressed Area Businesses.--A 
founder of a distressed area business seeking certification from the 
young entrepreneurs business center under this section for such 
distressed area business shall submit to the Administrator an 
application that includes--
            ``(1) a 5-year business plan for such distressed area 
        business;
            ``(2) the number of employees such distressed area business 
        intends to employ for each year of such plan; and
            ``(3) evidence that the founder--
                    ``(A) is also an employee of such distressed area 
                business; and
                    ``(B) is a recent graduate of an institution of 
                higher education.
    ``(c) Distressed Area.--
            ``(1) In general.--Not later than 24 months after the date 
        of the enactment of this section, and at least every 3 years 
        thereafter, the young entrepreneurs business center shall 
        identify and make publically available on the website of the 
        Administration a list of distressed areas.
            ``(2) Requirements.--A distressed area identified under 
        paragraph (1) shall be a county or equivalent unit of local 
        government of a State--
                    ``(A) that has, for the most recent 24-month period 
                for which statistics are available--
                            ``(i) a per capita income of 80 percent or 
                        less of the national average; or
                            ``(ii) an unemployment rate that is not 
                        less than 1 percent greater than the national 
                        average; and
                    ``(B) for which the young entrepreneurs business 
                center determines establishing small business start-ups 
                in such area would be economically beneficial.
    ``(d) Approval for Loan Cancellation.--
            ``(1) Founders of distressed area businesses.--The young 
        entrepreneurs business center shall approve a founder of a 
        distressed area business who submits an application under 
        subsection (b) for loan cancellation under section 455(r)(1) of 
        the Higher Education Act of 1965 if such distressed area 
        business--
                    ``(A) beginning on the date of such establishment 
                and ending on the date of the 24th monthly payment on a 
                loan described in such section 455(r)(1), was located 
                in a distressed area (as identified under subsection 
                (c));
                    ``(B) was certified under subsection (b); and
                    ``(C) on the date of approval under this paragraph, 
                has been operating continuously for not less than 5 
                years.
            ``(2) Employees of small business start-ups.--For purposes 
        of loan cancellation under section 455(r)(2) of the Higher 
        Education Act of 1965--
                    ``(A) an employee of a small business start-up 
                seeking such loan cancellation shall submit to the 
                Administrator an application, which shall include 
                evidence of the employee's full-time employment at such 
                small business start-up; and
                    ``(B) if the Administrator verifies the information 
                submitted in such application, the young entrepreneurs 
                business center shall approve such an employee.
            ``(3) Submission.--The young entrepreneurs business center 
        shall submit to the Secretary of Education any approval for 
        loan cancellation made under this subsection.
    ``(e) Termination.--An approval made under this section shall 
terminate 5 years after the date of submission to the Secretary of 
Education under subsection (d)(3).
    ``(f) Definitions.--In this section:
            ``(1) Distressed area business.--The term `distressed area 
        business' means a small business concern located in a 
        distressed area (as identified under subsection (c)) that has 
        been in operation for not more than 8 years as of the date of 
        submission of an application under subsection (b).
            ``(2) Institution of higher education.--The term 
        `institution of higher education' has the meaning given such 
        term in section 102 of the Higher Education Act.
            ``(3) Small business start-up.--The term `small business 
        start-up' means a small business concern that, as of the date 
        of submission of an application under subsection (b)--
                    ``(A) does not exist; or
                    ``(B) has been in existence for not more than 3 
                years.''.

SEC. 4. TREATMENT OF LOAN CANCELLATION.

    (a) In General.--Section 108(f) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new paragraph:
            ``(6) Cancellation of certain federal student loans.--In 
        the case of an individual, gross income shall not include the 
        discharge (in whole or in part) of any student loan pursuant to 
        the cancellation (in whole or in part) of such loan by the 
        Secretary of Education under subsection (r) of section 455 of 
        the Higher Education Act of 1965 (20 U.S.C. 1087e).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to discharges of indebtedness occurring after the date of the enactment 
of this Act.
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